The shareholders of Tower Semiconductor (TASE: TSEM; Nasdaq: TSEM) opposed the compensation policy proposed by the company at their annual meeting, and it was not approved. Other proposals put to the vote at the meeting were approved by the requisite majority, among them a proposal to raise the salary of CEO Russell Ellwanger and to allocate stock-based compensation to directors.
Under Israeli law, a company’s compensation policy has to be approved by majority of shareholders every three years. This is as opposed to the law in the US, under which a shareholder vote on executive compensation is not binding but enables shareholders to have their “say on pay”.
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Both Israeli and US financial institutions opposed Tower’s proposed pay policy. The policy is accepted or rejected as a package, and it may be that shareholders objected only to parts of it. Tower now plans to discuss the matter with its major shareholders in order to understand the objections to the policy and to decide on the next steps.
Under Israel’s Companies Law, the company’s compensation committee and its board of directors have the power to overrule the shareholders’ decision after reviewing the matter and publishing grounds for doing so. The stance of the Attorney General is that this power should only be exercised in exceptional cases. Among Tower Semiconductor’s shareholders are Migdal, Menora Mivtachim, Phoenix Financial, and US investment management firm T. Rowe Price.
As mentioned, the proposal to raise Tower CEO Russell Ellwanger’s annual salary was approved. His salary will rise by 5% to $1.08 million. An allocation of stock-based compensation to Ellwanger was also approved. The compensation policy that was not approved included a rise in Ellwanger’s maximum annual bonus from 175% of his annual salary to 225%, and a rise in the stock-based compensation allocation to senior managers (other than Ellwanger) from five times their annual salary to seven times.
Tower Semiconductor has a market cap of $26.1 billion after a 386% rise (in dollar terms) in its share price in the past year, although the price is 31% below the peak reached two weeks ago. For the sake of comparison, the PHLX Semiconductor Index (SOX) has risen by 133% in the past year, and has fallen by 11.9% in the past two weeks.
Published by Globes, Israel business news – en.globes.co.il – on July 7, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
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